The loans were to be paid in phases, but Fisker has missed production goals, keeping much of the federal funding out of reach for now. Fisker said it is working to renegotiate the loan agreement with the government.

"We have temporarily delayed work at the plant based on ongoing discussions with the DOE regarding funding for the Project Nina program. As a result, we have laid off 26 people," the company said in a statement Monday.

The Energy Department has drawn criticism in the past year when some of the startups it backed went belly up. Three companies that got loan guarantees or grants -- advanced solar panel maker Solyndra, battery-maker Ener1, and alternative energy firm Beacon Power -- have fallen into bankruptcy.

Energy Department spokesman Damien LaVera said both sides continue to work together and that Fisker's problems were typical for startups.

"The department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America," LaVera said.